Why the freemium model is a good thing

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There’s way too much noise about mobile games freemium model. I can understand why. I’ve read stuff on prefrontal cortex and children that make me appreciate the fact that there’s tighter control on in-app purchases, that the button name changed and there are warnings about in-app purchases.

Yes, some people went too far and focus way too much energy in seeing their ARPDAU grow $0.0001 through methods that go way beyond marketing and data analysis.

My personal opinion is that they are pursuing the wrong things. First a great game, then monetisation. I believe monetisation can be built around a great game. I don’t believe that a great game can be built around monetisation. I also believe the freemium model is a good thing for games and players if we build a great game. I have two perspectives on why this is. One passionate, one cerebral… no surprises I guess. 

From the passionate, visceral love for the art…

Imagine this: you created the best game ever. It is the biggest breakthrough in digital entertainment since Zelda. The gameplay is innovative, production values are astonishing and you did it all by yourself. You created a legacy and your work will define game development and publishing for years to come.

Can you imagine such a master piece?

Now answer me this: who should play such a game? The correct answer can only be everyone. There should be no restrictions. That raises another question: how can you make your master piece available to everyone? Why should such an extraordinary piece of art be labeled with a price? It cannot have advertising… or product placement! It is pure art.

I know most free to download games aren’t master pieces. The point I want to make is that freemium games, when done well, make available to everyone games that would only be available to a very small percentage if they were paid. Some of them astonishing technical and design accomplishments. I would have never played Real Racing 3 or Loadout if they were paid. Yet I have played both extensively and made purchases in both.

I know, this is anecdotal evidence and I of all people shouldn’t present it. But given the success of both games, maybe it isn’t that anecdotal and in the end isn’t that a win/win situation for both developers and players?

…to the cerebral, practical analysis of its data.

But let’s be honest, this is not about passion only, is it? Wages need to be paid, investments returned. Even in the digital market where there are no boxes moving, there’s still marketing, server infrastructure and many other costs. Can you imagine where games as an entertainment medium would be if it wasn’t an industry?

Let’s talk about money. Oh the horror to mention such filth and villainous thing!

Let’s imagine another thing: you made a game and your total revenue was $45.000. Which of the following scenarios would you prefer?

  • 900 people bought your game for $50.
  • 2.250 people bought your game for $20.
  • 100.000 people downloaded your game for free. 2.250 of them spent on average $20. The remaining 97.800 spent nothing. On average each of the 100.000 players of your game paid $0.45.

If you can put up a game with a fair economy as far as in app purchases go, wouldn’t you prefer the last option? I’m not asking to compromise whatever your sense of morality and integrity towards gamedev is, quite the opposite. I’m challenging you with the idea that if you can do it, isn’t it best for you and your players?

Those numbers are not made up by the way. According to Swrve’s New Players Report, 2.2% of all players make a purchase in the first 90 days they play a mobile freemium game, spending on average $20.62. The average revenue per install, which we can generalise as ARPU (Average Revenue per User) is $0.45.

And this is why the freemium model is a good thing:

  • Extraordinary games are made available to everyone for free
  • A very small percentage of the users pay on average less than they would if the game was paid
  • Accounting all users the total revenue is potentially higher at a cost per user lower than a cup of coffee

And the caveat of this is that if a game is making $0.45 per user, it is likely that it is a very good game. One that can have monetisation built around it, not the other way around. It is likely that it was made by game developers, not someone that spends time writing articles about exploiting prefrontal cortex and children.

Make a great game, the money will follow it. If you don’t make a great game, don’t blame those who do with the example of those who don’t.

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3 thoughts on “Why the freemium model is a good thing

  1. Really nice article! 🙂 Several cases i’ve experienced is the good game that is monetized wrong and people leave them because they cannot stand it anymore. It literally obligates you to pay for the game if you want to continue to play…

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    • Thank you.

      One caveat though, what you my consider to be wrong monetisation may be a biased view and that many people left may be anecdotal evidence. I’ve witnessed cases where people effectively complain in large numbers while there’s overwhelming evidence that whatever “wrong decision” was made was in fact beneficial for retention, engagement and monetisation.

      Our individual player view and satisfaction along with the view of people close to us might not be an indication of anything.

      Like

  2. […] I could do what everyone else did with Real Racing 3, dissect its features, the pros and cons of the “sort of multiplayer” and the new “in fact multiplayer” features. But to be honest, I would just be repeating what others have already said. Instead of that I want to go through a number of things that I wrote about some weeks ago regarding the freemium model being a good thing. […]

    Like

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